The Future of Farming: Pioneering the World of AgTech
An Entrepreneurial Perspective on the Future of Food and Agriculture Industry
FYI, before you read this month's post, please read below:
Greetings friends,
I made it to Palo Alto!
What a whirlwind these last three months have been. I was fortunate enough to visit three continents, welcome a puppy into my life, and gear up for the next phase of my life at business school.
In the month of September, I moved to Silicon Valley to start at the Stanford Graduate School of Business. The campus is immaculate, the weather is beautiful, and the people are incredible.
I am extremely excited for these next two years here in California.
For this month’s post, I will be exploring the rapid rise and future of the agriculture technology industry, or “AgTech” for short. AgTech is an area I am thrilled to discuss because as you know, over the last few years I have grown more health conscious and have done extensive research in.
Without further ado, from the GSB campus, I bring to you: the future of AgTech.
Thanks for reading and I look forward to another exciting topic next month,
Jimmy
Introduction
Ever since high school, working out and eating clean has been important to me. This stemmed from my desire to perform at the highest level on the football field. Catching passes and outjumping defenders in the end zone required heavy weightlifting, extensive protein consumption, and sufficient hours of sleep per night.
In my senior year of high school, I had my first moment of introspection when I looked in the mirror only to see a 200-pound-of-muscle human staring back, clueless. I realized then that I didn’t want to be big and bulky for the sake of sport (not to mention that my stomach couldn’t handle the enormous amount of food and protein I was eating).
When I arrived at Boston College in 2010, my mindset shifted from bulking up to being physically and mentally fit. In my freshmen year, I was fortunate enough to get introduced to friends who were extremely health conscience. Yes, of course they read labels, but they were able to tell me what those labels actually meant. And, I believed them. Not only did I believe them, but I started to research proper dieting on my own.
Over time, as I thinned out and my knowledge on the topic continued to expand, my passion for physical and mental wellness changed yet again when I turned vegan about two years ago when I gave up all meat-based products for Lent.
Up until my pre-MBA backpacking trip to Indonesia, my research in health and wellness peaked. While roaming around the streets of Bandung, I had a second moment of revelation: the food and agriculture industry is polluted with inefficient operations, animal maltreatment practices, and an unhealthy amount of environmental sabotage from Greenhouse emissions.
This got me thinking: Is there a scalable solution in the food and agriculture space that is both socially and environmentally impactful to the world?
As soon as I returned from Indonesia, I hit the ground running. I began reviewing the breakthrough leading research studying journals of medicine, reading abstracts from Avian Pathology, and spending countless hours listening to podcasts from the AgTech world. All of this newfound knowledge in agriculture triggered something hidden deep inside me. My research harkened me back to the months I had spent growing up on my Abuelita’s farm in Bolivia each holiday season. My family and I used to enjoy visiting the sugar cane plantation, riding horses, and learning Spanish (which has served me well on my recent trip to South America!). Memories such as these washed over me like a Jersey Shore wave.
So, friends, let me take you on a short journey to the deep heart of lovely South America, and then back to the USA.
Agriculture Technology (AgTech)
The need to address healthy eating starts with fresh fruits and vegetables. Santa Cruz, one of Bolivia’s two capitals, has hundreds, if not thousands, of varieties of these ag products, right off the farms. I can still recall the extraordinary images from when I was child, looking out on the horizon of my Abuelita’s farm and seeing acres upon acres of untouched land. These memories made me weary of the rapid rise of companies such as ‘Beyond Meat’ and ‘Impossible Burger.’
I grew terrified that these businesses, popular for producing “plant-based” meat alternatives, might not be as plant-based as they want the public to believe. For instance, take a look at the ingredients list on Beyond Meat’s packaging:
How comfortable are you putting ‘Gum Arabic,’ ‘Succinic Acid,’ and ‘Methylcellulose’ in your digestive system? …My thoughts exactly…
I began to dive deeper. Can these companies really get away with calling themselves ‘plant-based’? Are these meatless meats actually better for you than the actual meats are?
As I attempted to answer this question, my entrepreneurial antenna went up when I read an article that showed that gangrenous dermatitis (GD) is a common disease that comes from infected poultry. An outbreak of GD in a specific, yet popular for human consumption, chicken breed called Broilers, started causing death to chickens making me wonder how harmful these diseases could be for humans who end up consuming them.[1] And, since chicken is among the top meal choice for carnivores, I came to the conclusion that creating a plant-based solution to this problem could benefit both chickens and people.
Another vivid memory came to me while I walked the shorelines of Lombok, Indonesia, as I thought back to my childhood on the farm. The plantation we were on was about a two-hour drive from the city center. Hauling truckloads of livestock, fruits, and vegetables was a meager and low-grade method for transport. Farmers often risked losing their loads because of the rocky terrain and weak infrastructure. What’s more, the fuel needed to power the trucks polluted the air.
I couldn’t help but ponder, is there a more efficient and environmentally friendly way to safely transport agriculture?
Again, I double-clicked on this issue of transportation. This led me down a path to learn more about vertical farming. Through vertical farms, populations in most countries may be served, especially where the economic conditions are extremely poor (e.g., Bolivia). By having centralized locations in cities, fresh produce may be delivered to customers in a much more environmentally friendly way. For example, one way the environment would benefit from centrally located vertical farms would be the dramatic decrease in gasoline usage that currently allows for the relocation of fresh produce to distributors.
Vertical farming offers the benefit of scientific experimentation that may lead to healthy alternatives (with no additives) and the creation of entirely new markets. It also provides consistent crop yields annually due to the controllable environment indoors, which will lessen the likelihood that populations do not have access to certain foods.
“Vertical farms can produce crops that are environmentally safe, nutritiously valuable, affordable, and produced fairly. These crops are intended for citizens living locally to the farm. They would not require great at-distance transport, thereby reducing fuel usage, which currently consumes 20% of all USA fossil fuels… Not only would vertical farming produce crops year-round and be more environmentally-friendly, it would also make more efficient use of waste… waste could be converted to methane gas, using anaerobic digesters that could then be used to generate electricity for the farm.”[2]
This type of farming represents a microcosm of how important technology will be to the future of farming. As the predicted global population is expected to continue rapidly growing over the next 30+ years (by a couple billion people), the amount of finite arable land on Earth will likely deplete and pose as an opportunity for entrepreneurs to continue disrupting the industry. The graphic below illustrates this point.
Further improvement in agriculture technology will be significant to combating climate change as well:
“Global warming, climatic change, the interface between environmental and economic decline, cataclysmic natural disasters, mass environmental migrations, and the impending end of the oil-based infrastructure, among others, have created a brewer’s stew of escalating and symbiotic problems that are having a drastic effect on social cohesiveness and the Earth’s ecological carrying capacity.”[3]
So, with all this pressure to infuse technology into the agriculture space, what can we do about it?
AgTech innovation and funding for startups work together to produce this integration of technology in tandem with the growing awareness of the value-add of producing food that is beneficial to human health and the environment. The existence of companies like Trader Joe’s, for example (another California based company, founded by a GSB alum), has grown to become a behemoth in the grocery space because of its focus on targeting health conscious consumers.
We know the market exists for healthy eating. We know it’s growing. Let’s dissect the entrepreneurial space.
There are hundreds of AgTech startups popping up across the U.S. as the demand for industry disruption increases. In fact, in Salinas, California, the loss of Capital One and almost 900 employees spawned a city initiative called AgTech Innovation Ecosystem. The goal of the initiative is to help create jobs and attract startups while providing education that is intended to attract entrepreneurs. Now Salinas can partner with Silicon Valley to create a whole host of new ideas benefitting the world through AgTech.
“One of the key programs that SVG Partners launched in Salinas was THRIVE AgTech, a highly competitive, annual eight-week accelerator program that provides AgTech startups from across the globe with highlevel mentorship from Salinas Valley’s largest agriculture companies and industry leaders”.[4]
As innovation in the food & agriculture industry grows, the venture capitalist funding naturally follows. Below is a snapshot of the growth in VC deal activity in AgTech over the last decade, which support the notion that the industry is ripe for disruption.
The recent growth in AgTech startups is reinforced by large companies in the food & agriculture space that are spending significant resources to acquire companies and innovate in the industry. A good example of this business imperative can be seen in the Southeast Farm Press in August 2016 when both Bayer’s CEO, Jim Blome, and the CEO of AgTech Accelerator, John Dombrosky, mentioned continued innovation in agriculture paired with useful application in business being the present and future of business with a growing world population coupled with the need for health prioritization among animals and plants.[5]
Conclusion
The synthesis of healthy eating and environmental sustainability is both exciting and rewarding as being a part of its development gives rise to a meld of research and applied technology on both a micro and macro level. The micro level referring to families using technology, first at a basic level producing what individuals need to eat, but eventually expanding to other areas of health, beauty, and fitness, and the macro level referring to tackling global warming, world hunger, and human longevity.
In closing, after spending the summer traveling, reflecting, and researching, I am ready to share my personal pain points. And, as I embark on my educational journey here at Stanford University over the next two years, I am overly excited to explore this passion on a deeper level and would absolutely love to take you on that journey with me.
After all, we are all on our own unique entrepreneurial journeys through what we like to call ‘life.’
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Sources:
[1] Li, Guangxing, et al. “Immunopathology and Cytokine Responses in Commercial Broiler Chickens with Gangrenous Dermatitis.” Avian Pathology, vol. 39, no. 4, Aug. 2010, pp. 255–264., doi:10.1080/03079457.2010.495382.
[2] Aswath, C., et al. “Utilization of Vertical Spaces for Horticultural Crop Production in Urban and Peri-Urban Areas.” Current Research, Utilization of Vertical Spaces for Horticultural Crop Production in Urban and Peri-Urban Areas, vol. 110, 2016, pp. 2048–2049.
[3] Besthorn, Fred H. “Vertical Farming: Social Work and Sustainable Urban Agriculture in an Age of Global Food Crises.” Australian Social Work, vol. 66, no. 2, 1 June 2013, pp. 187–203., doi:10.1080/0312407x.2012.716448.
[4] Myrick, Andrew, and Rachel Deloffre. "Planting the Seeds for an AGTECH INNOVATION ECOSYSTEM." Economic Development Journal, vol. 16, no. 4, 2017, pp. 5-10.
[5] Southeast Farm Press, Bayer, CEO stresses innovation in agriculture, & New accelerator to fund ag startups, News of Agribusiness, August 2016, pg. 18.